For Lenders Preparing to Close Out 2018

With the calendar year coming to an end, now is the time to get your books in order and make sure you can accurately account for your lending and leasing activities for the year.  For those that service their loans and leases with Moneylender Professional, we have a few tips to make sure your records are ready for year-end accounting and reporting.

Don’t Print 1098s until 2019. 

Moneylender 3 uses the template system to provide 1098 forms for customers in the USA.  The tags for these templates use total from the previous calendar year.  That means you can’t get 2018 totals until 2019.  You can use Moneylender’s emailing capabilities to email the Substitute 1098 forms directly to your borrowers straight out of Moneylender.  You can print the substitute forms for anyone without a valid email address.

For the official IRS forms, order them from the IRS, and you can print the Data-Only flavors of the 1098 templates directly onto the official forms.  Be sure to check the alignment with the black copies first before running the red copies through the printer.  Printers can vary and you might need to tweak the positioning or template offset to get the data to align perfectly on the official forms.

Make sure loans that were closed in 2018 have zero balances and are marked closed.  

Moneylender 3 has a set of calculations to make sure closed loans always have zero balances.  Before closing any loan, make sure to mark any payments after the last due date or on the closing date a Final Payments (Payoff Payments in slightly older versions of Moneylender 3).  Marking a payment as a final payment tells Moneylender not to hold a payment until an upcoming due date but to instead apply it right away.

Then click Loan > Close Loan.  The closing routines will add or adjust the appropriate per-diem interest and give you some options for dealing with any Escrow balance and/or loan surplus balance.  If the loan was overpaid, Moneylender will help you add an appropriate principal disbursal to the loan so you can refund the overage to the borrower.

If reporting to the credit bureaus, make sure the final status of the loan, as it should be reported hereafter is properly set to match the circumstances of the loan closure.

Check out the Amount Due Ledger and Payment Distribution on your loans.  

For any loans that show that they are past due or that you think should be past due but say they’re current, Give the Amount Due Ledger (Ledger Transactions report, and then change the Account to AmountDue and click Refresh) a quick review.  When the balance of the AmountDue account is zero, that means the loan is paid current.  Look at the balance over time and see if the loan has been variously caught up and behind as you would expect it to be.  Run the Payment Distribution report on the loan and scan the interest and principal columns.  If the borrower is consistently on time, the interest should be steadily decreasing without major fluctuations, and the principal should be steadily increasing.  If there is a major disruption to those smooth numbers, is it because of a known event on the loan or is it because of an error in entry.  For example, if there’s suddenly a payment that’s all principal, you might catch where a payment was accidentally entered twice.  Or if suddenly a payment is twice the interest, either the borrower skipped a due date or a payment might not have been entered that should be.

A quick review through your accounts can make a huge difference in how smooth things will go when you prepare your taxes and other year-end reports.   If you can’t figure out why you’re seeing certain numbers in places, feel free to email or call Whitman Technological for help.